Most of us would prefer to leave a strong legacy behind to the ones we love. But for an increasing number of us, a large slice of our hard-earned wealth could end up with the taxman when we die – not our loved ones.
The problem, which you may already be aware of, is inheritance tax. This is a financial burden that affects thousands of families in the UK, and has increased so much recently that the amount of annual revenue has reached record-breaking figures.
How does inheritance tax work?
If, upon your death, your estate (ie your home, savings and investments, jewellery, car and household furnishings – minus any liabilities) exceeds your available inheritance tax allowances (the nil rate bands), any amount above this will be subject to 40% inheritance tax. In many cases, the bill can equate to thousands of pounds.
If you’re single or divorced, the nil rate band is £325,000 and if you’re married it’s up to £650,000. Since April 2017, you can potentially use the Residence Nil Rate band – currently worth £125,000 (for the 2018/19 tax year) – in addition to the existing allowances. However, it can only be used against a home you have lived in at some point, and further complexities mean not everyone will benefit from this allowance.
Concerned about inheritance tax? We can help
If you think you may have an inheritance tax liability, don’t worry. Although it can potentially lead to distressing consequences for your loved ones, the good news is that with the right plans in place – and if you tackle it in good time – you may be able to address it.
We can find out whether you may have an inheritance tax liability either now or in the future. If necessary, you can benefit from an in-depth review with one of our advisers – who can look at potential solutions with you and offer personalised recommendations.
Everything will be explained to you in clear and honest terms. We won’t bombard you with technical jargon and will make sure you’re fully happy with your decisions. Furthermore, you won’t be pressured into the advice provided and you’ll have all the time you need to decide your next steps.
If you’d like to find out whether inheritance tax affects your loved ones, simply request a call back today and a member of our specialist team will be in touch.
Speaking to us as soon as you can is a great first step – and could provide you with peace of mind over your family’s future.
Inheritance tax planning solutions may put your capital at risk so you may get back less than you originally invested. IHT thresholds depend on your individual circumstances and prevailing legislation, both of which may change in the future. Some areas of inheritance tax planning are not regulated by the Financial Conduct Authority.